DTN Before The Bell Livestock

GENERAL COMMENTS:

Trade volume is quiet through the entire livestock complex. Mixed live cattle moves are keeping buyers slightly interested, although narrow trading ranges have limited the overall activity levels Wednesday morning. Corn is trading higher in light to moderate trade. Stock markets are higher in limited morning trade. Dow Jones is 513 points higher with NASDAQ up 402 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures are hovering in a narrowly traded range with a combination of short covering and follow-through selling developing despite the recent boost in beef values. Concern surrounding the activity level and direction of cash trade at the end of the week as well as lackluster follow-through interest in nearby contracts could keep prices inactive during most of the day. Cash cattle markets are quiet with limited interest seen until later in the week. Asking prices are still hard to pin down, but expected to remain near $110 per cwt live basis. Open interest fell 795 positions (274,603). December contracts lost 2,449 positions (97,084) and February contracts added 279 positions (68,625). DTN projected slaughter for Tuesday is 120,000 head.

FEEDER CATTLE:

Open: Mixed. Feeder cattle futures are mixed to mostly lower following the inability to spark active buyer support early in the week. This may add further price pressure to the complex, but given the aggressive gains seen over the last week, support levels are not yet in danger, as prices may hover within the current trading range over the near future. More focus will be placed on cash feeder cattle trade during the upcoming days in order to potentially spark increased long term buying into the futures complex. Cash index for 11/2 is $138.03, up 1.27. Open interest Tuesday fell 1,099 positions (41,051).

LEAN HOGS:

Open: Steady to 50 cents higher. Limited buyer support redeveloped early Wednesday morning following mixed market moves over the past two trading sessions. The ability to regain buyer support at support price levels near $66 per cwt is sparking limited interest into the complex, although increased support may continue to develop over the next couple of hours. Traders are looking for additional firmness in cash values as well as the ability to stabilize pork cutout values during the day. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady. Open interest fell 923 positions (215,870). December fell 1,588 positions (77,584) and February gained 568 positions (52,646). Cash lean index for 11/2 is $72.88, down 0.60. DTN projected slaughter for Wednesday is 490,000 head. Saturday runs are expected at 278,000 head.

Rick Kment can be reached at rick.kment@dtn.com

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